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Microcap & Penny Stocks : Naked Shorting-Hedge Fund & Market Maker manipulation?
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To: dvdw© who wrote (3323)3/21/2008 10:32:20 AM
From: rrufff  Read Replies (2) of 5034
 
It may be deeper than that, or perhaps, more accurately, we just don't have the information to know, with certainty, if there is "certainty" in the settlement of shares.

Have you noticed all the various permutations and combinations you see on message boards as to how to prevent shares from being "borrowed" for shorting?

I've seen arguments claiming each of the following:

-Set high price sale

-Call and request

-Have in cash portion of account

-Have physical certificate.

I've also had variations of the same given to me at all levels of brokerage accounts.

The reality, I believe, is that there is no "certainty." Nobody knows what's going on.

The obvious way of preventing one's shares from being borrowed would be to hold the certificate. But does this even matter in an environment where demand can be met by artificial short creation by writing calls and where options MM's have an exception to the rule prohibiting naked shorting? Does it make a difference when a MM can keep trades open indefinitely? We see now that hedge funds and prime brokers attempt to scam each other. Who thinks they care at all what they do to the public? Does it make a difference where the DTCC can just say, "we didn't lend YOUR shares, we lent "someone else's?" Does it make a difference, where information is published late and sporadically, under the guise of "protecting" the industry?
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